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ITC Availment

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Gangeshwar

proprietor

121 Points Posted on 18 February 2021

Dear All,

In one of our real estate companies, we have been charging ITC on duplex and flats sold @ 5% but we are setting off the liability against brought forward ITC. we are not claiming any fresh ITC but adjusting against the past ITC brought forward. Now the query is since we are charging GST @ 5%, can this brought forward ITC be claimed or NO ITC be claimed against the liability.

Another query is now during the current year itself, we will be selling some more flats and shopping complexes (another project but under the same company), can we charge GST @ 12% and claim all ITC. Is this switch over from 5% to 12% permissible during the year.

thanks in advance.

Replies (2)

Quick Summary

This discussion explores the complexities of Input Tax Credit (ITC) in real estate sales. The user is asking if brought-forward ITC can be used to offset GST liability when charging 5% on duplexes and flats. They also inquire about the possibility of switching to a 12% GST rate for new sales within the same year to claim all ITC. The initial response suggests that brought-forward ITC cannot be utilised when charging 5% GST, implying the tax must be paid in cash with interest.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 18 February 2021

It is possible to have unclaimed input credit. Due to tax on purchases being higher than tax on sale. In such a case, you are allowed to carry forward or claim a refund.

If tax on inputs > tax on output –> carry forward input tax or claim refund

If tax on output > tax on inputs –> pay balance

CA Altamush Zafar

GST Consultant

10402 Points Posted on 18 February 2021

This requires a long answer.
But as far as first query is concerned you cannot utilise itc. It will be deemed that you haven't paid the tax. You will have to pay tax in cash along with interest